The Investor Advocacy Committee of the Board of Directors of the World Federation of Investors Corporation (WFI) shall be appointed by the Chairman. The Committee's purpose shall be to guide and support WFI’s advocacy role in a manner that befits WFI’s role as the world’s largest non-profit membership organization for national individual investor associations and is consistent with WFI’s Mission, Vision, Investor Rights and Investing Principles. See Investor Advocacy Committee Charter.
The Global Policy Board of Institutional Shareholder Services (ISS) invited feedback on proposed updates to ISS's benchmark proxy voting guidelines. As part of its role as an individual shareholder advocate, WFI submitted the following letter to ISS:
The World Federation of Investors (WFI) is composed of thirty-seven national investor education/advocacy organizations from North and South America, Asia, Africa, and Europe. For over thirty years, WFI has supported efforts to empower individual investors and encourage good corporate governance practices.
Consistent with this mission, WFI supports SEC's amended Rule 14a-8 that, among other things, helps to make the proxy process function in a more democratic manner, similar to an actual in-person meeting of shareholders. Since ISS's proposed policy change appears to be an adaptation to support Rule 14a-8, WFI supports ISS's proposed policy change.
We note that ISS wishes to take into consideration the percentage and duration of shareholder ownership in any proxy access proposal and urge ISS to favor reasonable proxy access proposals that enable individual investors to have a voice. Examples of this could be to allow a lower percentage ownership threshold for individual investors versus institutional investors, and to allow individual investors to pool their holdings to reach the percentage ownership threshold.
Data show that individual investors are disproportionately long-term investors. In fact, long-term investing has been a cornerstone of WFI's educational efforts. We therefore suggest that ISS give consideration to proxy access proposals that favor investors who have held a company's stock for one year or longer.
We regard the voice of the individual investor as an important part of our mission, and an important contributor to the effective functioning of world financial markets. We welcome the opportunity to discuss this matter further with ISS.